Manufacturer Selling Prices - ?

[simongt]

Now we have the wonders of t'net, it's interesting to observe how manufacturer X makes product Y and sells it for price Z.
Then you observe that other traders sell exactly the same item made by manufacturer X at a lower price.
As said item isn't a copy / knockoff and presumably the traders have to buy product Y from manufacturer X, how is this achieved - ?
Something to do with 'market forces', of which I'm higgerant - ?

 

[Regular.Cyclist]

Large companies negotiating discounts with manufacturers and willing to take less profit on each item? They probably expect to be shifting high volumes to make it worthwhile for them.

 

[simongt]

I

Large companies negotiating discounts with manufacturers

Good point, but in the case of a couple of recent purchases, the supplying companies, whilst reputable & well established, don't really fit the 'large' qualification.

 

[midlife]

Sellers that don't have a bricks and mortar shop can sell cheaper, or take less profit, grey import, . Loads of reasons why can be cheaper.

 

[Ian H]

Manufacturers wholesaling to retailers won't want to undercut said retailers, who are their major customers.

 

[Cycleops]

Manufacturers often create a MSRP (manufacturers suggested retail price) which is inflated and the trader buys the item at a wholesale price and they can then offer the product at a seemingly discounted price compared to MSRP and still retaining their margin.

 

[Slick]

I agree, nobody wants to get involved in a race to the bottom.

 

[Gwylan]

Sellers that don't have a bricks and mortar shop can sell cheaper, or take less profit, grey import, . Loads of reasons why can be cheaper.

A very one dimension view

 

[Gwylan]

I agree, nobody wants to get involved in a race to the bottom.

You just want to have the most air left when you get there

 

[raleighnut]

Pretty much the same with everything these days, retailers find they're 'overstocked' so try to regain some liquidity by discounting.

A recent case for me was needing a new stylus for my turntable, everybody was selling them for £400 but Maz found a company getting rid of their stock for £279, and before anyone says you can get a 'used' one off the bay much cheaper I for one wouldn't know how used/abused it was probably no better than the worn one I was replacing (which I've kept for playing scratched LP's I've had since the 70's)

Nagaoka JNP 300 if anyone is interested.

 

[PeteXXX]

Some companies are more efficient than others with less wastage and lower overheads.
Some companies are more greedy, too.

 

[oldwheels]

Retail price fixing by the manufacturer used to be the norm until it was made illegal and so a retailer can sell at whatever price they fancy.
There is something called skimming the market where a product is sold at a high price initially and then as all the buyers at that level have bought some plausible reason is given for lowering the price and so on to rock bottom.
Another is to negotiate a low price for a high volume from the manufacturer then sell as many as possible at a high price and then more or less dump the rest at manufacturers purchase price.
It's a jungle out there.
I was a retailer but not of cycling stuff.

 

[vickster]

Some companies are more efficient than others with less wastage and lower overheads.
Some companies are more greedy, too.

And some are just a front for money laundering and other illegal activities

 

[Cycleops]

And some are just a front for money laundering and other illegal activities

I've always suspected Halfords.

 

[Alex321]

Many manufacturers will have a "Recommended selling price", and they will usually sell at that price themselves.

But of course they sell to retailers at wholesale prices, and if the retailer wants to take a smaller margin, that is up to them.

Quite a few manufacturers will sell at retail, but don't really want to, so they aren't worried about their prices being higher than the retailers. Some manufacturers just don't do retail sales at all, and will just direct you to stockists.